Razorfish: Local, In-Game, Digital Out-of-Home To Gain In 2010

Ad verification systems, local and in-game advertising, and digital-out-of-home advertising are among the hot growth areas for 2010, according to the annual outlook report from Razorfish released today.

More broadly, the digital agency predicts that mobile and social media marketing will become key parts of clients' media budgets, if not necessarily reflected in large dollar outlays. "Although we still examined how our clients spent their media dollars with the major players, we also wanted to give weight to the digital advertising long-tail," said Jeremy Lockhorn, who leads Razorfish's emerging media practice.

Despite the Great Recession, the firm said clients have continued to experiment with new media in 2009 and Razorfish expects that activity to increase with a rebounding economy this year. Overall, the average client media spend with Razorfish went up 4% last year, compared to a 13% drop in 2008.

Analysts are now projecting double-digit ad spending growth this year after a solid first-quarter total of $5.9 billion, according to data from the IAB and PricewaterhouseCoopers. Higher spending doesn't mean marketers will be any less vigilant this year about making sure their ads are appearing where they're supposed to.

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That's why Razorfish expects ad verification systems -- tools that confirm ads are running where they should be on traditionally opaque network buys, and started showing up last year -- will gain more ground in 2010.

The firm said 20% of its clients are interested in learning more about test verification systems this year. "Because of the increase in the use of ad exchanges and networks, advertisers want to make sure they're in brand-safe places," said Lockhorn.

Razorfish also expects clients to shift more of their budget to local online advertising with the continuing decline of print newspapers and the rise of devices like the iPad and location-based mobile apps like Foursquare. (One-third of clients ask the firm to run local ads currently.) But Razorfish noted that spending on local display has been twice that of local search, possibly because of more inventory being available in display.

In-game advertising, whether in immersive or casual games or social apps like FarmVille, is also tabbed for accelerated growth this year. Because of the segment's "high-impact" visuals and engagement levels, Razorfish expects more investment by non-endemic brands in the space.

When it comes to social media, Lockhorn said he anticipates Twitter to make more strides in monetizing the microblogging service. With the company providing account verification for brands and introducing its "Promoted Tweets" ad program last month, he said the company has taken smart initial steps to incorporate advertising and marketing into its platform.

But Lockhorn also emphasized that wider use of Twitter and other social media won't necessarily translate into big increases in third-party ad dollars. The category still only accounts for 4% of client media spend at Razorfish. That's because much of the investment is going to earned media -- things like Facebook pages, applications, digital coupons and other promotions that don't include purchasing ad space.

That goes the same for efforts in the mobile space, which garnered an even smaller percentage of ad spend. "This just means pure media spend isn't reflective of all the dollars going into social media or mobile," said Lockhorn.

Ads in those segments can also be bought more cheaply than some other digital and traditional media categories. One format that combines both offline and digital advertising -- the burgeoning digital out-of-home channel -- is also projected to continue growing, especially among retailers trying to connect with shoppers.

But Razorfish points out that there's still a gap in measurement. "The impact of these initiatives isn't yet quantifiable to the level which digital marketers have become accustomed," its report stated.

1 comment about "Razorfish: Local, In-Game, Digital Out-of-Home To Gain In 2010".
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  1. Pooky Amsterdam from PookyMedia, May 24, 2010 at 12:10 p.m.

    As former JWT CEO Bob Jeffrey said, "Time is the new currency. Our job is to ensure that more people spend more time with our client’s brands. We need to create ideas that people want to spend time with. The better the idea the more time people spend with it.”
    Truer words were never spoken - The rise of Social TV, which I am on the forefront of, and branded content which delivers activity that integrates the customer into that content will be the way to deliver that time.
    Immersive worlds and developing branded games for companies within them is a specialty of ours.
    Great article & so glad to see this.

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